lou: time for your comments. debbie said thank you for standing up for america. those in congress are sucking their thumbs. that's it for us tonight and thank you for watching. good night, new york. neil: lie in my not feeling rested? welcome, everybody, i am neil cavuto. i would like to put today's stock market gains into perspective. i do not want to be a half-empty glass guy, but i do want you to be aware of what propels this. the federal reserve coming in, the third time to say it is going to keep interest rates low.

think of what wall street did yesterday to take a look of the numbers today. a huge run run-up, not so much on this 40 billion-dollar issue, but they reacted to a bailout. an artificial stimulant to keep punctual out of the party going. the problem is that has not been a great party. the markets have been running up on the notion that this is the best straw that we have. and ben bernanke is the best guide we have in monetary policy is the best option we have. ben bernanke does appear to be the only guy getting something done. the president doesn't seem to be engaged. congress can't get its act together. we go back to the sky. that's what concerns me. we will get a fair and balanced

debate with senator phil gramm. senator, i guess that is what troubles me. not so much that i love romance as much as the next guy. what is prompting this? what you say? >> well, first of all, you have to remember that everything that is doing now is going to have to reverse when the economy ultimately starts to grow. for example, this new action, one shilling and a half of government debt. it will monetize the debt ridden when it sells that trillion and a half dollars, interest rates will rise substantially. the federal deficit will go up. every 1% rise in interest rates will cost $100 billion.

mortgage-backed securities, when they are sold as they have to be when the economy starts to recover, the mortgage-backed securities market is small by historic standards. these massive sales are going to end up driving up interest rates far more than they are driving them down now. neil: here is what really worries me. taking a look at the big board today. the fed today, ben bernanke was saying that he watches this. he watches the feel-good effect that the market has. that was a new wrinkle for me. i don't need to make a bigger deal out of this than when was warranted. but i don't think the fed chairman should be concerning himself with the aberrant moves

of the market. when basic policies pegged back, i get nervous. >> we have long-ago experience diminishing returns in trying to use monetary policy as a substitute for bad financial policy. the problem is, he is the only guy in town, but these actions aren't free. they are all going to have to be reversed when in god's good time we have a full-blown recovery. when we do, they will drive up interest rates more than they are driving them down now. neil: you don't think that he honestly puts a priority on inflation, let it be damned, the economy includes a three-year promise to keep rates as low as they are. and that once they stabilize, inflation would be the lesser worry -- you don't agree?

>> well, the american economy is ultimately going to overcome not only the disease, but the absurd description of the doctor. i happen to believe the election could speed that process up. but the bottom line is when the recovery comes, all of the things that have been done in the last 55 months are going to have to be reversed. when everybody knows that rates are going to fall by a modest amount, that the economy is going to respond by a modest amount now, it seems foolish to do things that are going to have to be reversed later when there's every reason to believe that interest rates are going to go out more and a recovery is going to be impeded by that action. [talking over each other] [talking over each other] neil: will there be another bubble? >> well, it could create a

wealth effect for the stock market. but what i'm worried about is that we are doing things that aren't helping much now that nobody believes can help very much. but they are going to hurt a lot when the recovery comes. and i just think it's a bad trade-off. good decisions represent choices based on marginal cost and marginal benefits are the marginal benefit is very low and falling. the marginal costs are going to be high when the recovery starts, and it's going to happen. we are not writing off america here. neil: senator phil gramm, thank you very much. fair and balanced, we will go to emanuel cleaver. he brought down the house in charlotte. he worries that ben bernanke is bringing down this economy and turning it into an inflationary

spiral. maybe he is the only guy they can get something done. what he think of that? >> i agree with the senator. senator. some of the things that we have done or that the fed is going to do, will have to be reverse when we go on the right side of the recovery. but i think the one thing that is good, this recession was brought about in part by all of the toxic mortgages, securities backed mortgages. and so we still have a problem in the housing sector. when the fed says that they're going to be able to buy from the mortgage-backed securities, i think that that has to be at least a psychological thing. >> mip, but it hasn't done wonders up front. we are seeing some smattering now it has been a long road. the fed has made a commitment that is going to keep rates low in the face of inflationary news that has some folks concerned

that the fed is creating another bubble and will get us into an even bigger pickle. >> if i can, can i just say that the reason i'm saying that is that unless the federal government is going to function, we are going to continue in this pattern a couple of steps forward and 20 five steps backward. movies is already warning us about her credit rating. as long as we have this tribalism in washington, we will not be able to set the ship forward. frankly, the whole world, including investors and the business leaders are looking at us. we are doing absolutely nothing. we are doing what rocking chair politics, a lot of movement back and forth, but we are going no place. i am saying now that there are

50 republicans and 50 democrats, i was one of the organizers who called a press conference and announced that we were supporting simpson-bowles. you know, none of us love it, but we knew that something had to be done. unless we are going to get men and women of goodwill who stand up and say, we have to deal with entitlements and we have to deal with additional revenue. we are going to be just like this for years and years to come. neil: i think you're right about that. i gave you credit when we were in charlotte about that. i guess it comes back and just to remind folks, we very much criticized the brave bailouts under president bush and senate was a slippery slope. you and i might disagree on that issue. i'm concerned about a country spending money that it doesn't have. this setting is just an extension of that. but with the fed.

it is like we are on this path that any reasonably thinking american could say, well, that can go can't go on forever. i guess the hope is that it creates this stable recovery, it gets put up bright right and there is nothing to worry about afterwards. >> well, you actually hit it on the head earlier. when he said that ben bernanke was the only adult in the room. in the absence of government, ben bernanke is doing something to try to get the economy started, and we are doing nothing, and he is trying to do something. even if we disagree with them. we are not dealing with the deficit, we are not dealing with the debt. we don't even have a budget. you know, and the people, the american public ought to be

outraged. they can turn to ben bernanke if they so choose. but he is acting as the government of the united states in the absence of one. >> that is very well put. congressmen, always great to have you. congressmen emanuel cleaver. he gave the best speech of that convention. neil: out of this world spending. guess what? it is cheaper to buy a home now than it is to rent. how that could be more food for thought. next, with it looks like more people are avoiding big banks. the founder of kinko's

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it turns out there more americans are saying that they are fed up with the fees and hassles. americans are still willing to burn. the government doled out $245 billion to bail them out and then they can lend out any of that money. folks are right on. good to have you. >> great to be here. how are you doing? be one i'm good, buddy. many of them go to a lot of credit unions and hooked up with brokerage houses, but the bottom line -- but he think is really

happening? >> i don't know what's really happening. why can't we pay with our transactions a lot cheaper than going through conventional thinkers if we are willing to take payments from cell phones? neil: now you are making way too much sense. so i will try to go back into the mucky world of banks. that is theirs. but if a lot of people end up doing that, that is not good for the banks and they are going to be going back to us for a bailout. what we do. >> let's look at jamie jamie --e

dimon. we haven't even heard the tip of the iceberg with the libor steno. every mortgage rate and credit card debt was a corrupted rate. neil: so you think that these guys are occluded bunch. but be careful what you wish for. the argument goes, the 2008 not dumb all over again to i'm saying that hold the bankers accountable. for us not to fire jamie dimon, and the minute that he lied to his shareholders, -- neil: you don't know that he lied to his shareholders. >> he lied one month prior. a tempest in a teapot. it comes out a billion dollar loss and it was a four and a half billion dollar loss.

[talking over each other] neil: in the end he still made money. >> i am not convinced that two wrongs make a right. if you're a liar, you're a liar. i'm saying that the libor scandal, when he comes out and says afterwards, are you going to give up your boldness this year, why would the ceo even have a place in the board of directors? does the tail wag the dog or does the board of directors have legitimate reasons to hold these folks accountable? neil: we are going to disagree on that. if you make money as a shareholder, by and large are making money. i do see your point. here is what i want to focus on. you'd think that average americans are looking at these developments. the scandals and the trades and saying to the hell with it. and that will be a banks undoing.

you know, we can complain about our government and spending, and like we did with mortgages, we have real corruption within society. i don't even know if you look at the balance sheet, how much mortgage that there is. all the banks have aggregate we -- aggregate equity. somebody has to hold these folks accountable.

neil: a supercar with a super price tag may just be getting too hot under the engine.

neil: in our fox financial flash, lamborghinis are quick to catch your eye. the italian automaker's discovering trouble. and the iphone five. boosting its share. $685.2 a share.

and real estate is cheaper than renting. if it's cheaper to not buy it or to not buy because nobody's buying -- i have a guest who says that americans are leaving it up to the economy. that may very well be the case, john, but the dynamics have changed. renting used to be the better option. for whatever reason, the math crunching the numbers, by indians. that tends to be a good prediction. >> i don't know but i disagree. i think would be unstable economy and the uncertainty of the future of the economy and the election and where will be going next, i hope a lot of people are risk-averse at this

time. renting is a safer place to be than home ownership. but home ownership may not be what it has been in the past tomorrow. many of us know those who have own homes and lost their equities and homes. the nature of things today is very different than it was 20 years ago. to if you don't mind my switching gears, in light of the fact of what it is today -- this is the one thing that stuck out among many things in the fed's announcement. we are going to keep short-term interest rates right where they are. that is a long commitment. that is an absurdly low interest rate. you have to wonder, why more people are responding or taking advantage of them or they are under rotter and they can take advantage of them, giving homes away at that rate -- right? >> i think that's true, but you still have a very high unemployment rate all across the

country. there are a lot of people that can qualify and the qualifications for people is excruciating. even though the rates are low, it's very difficult for people who qualify for loans. neil: do you think of the changes that may be banks assure that the fed will be doing this for an extended period of time? opening up the spigot, lending more -- will it change anything? >> well, i think we certainly need for that to happen. but the underwriting criteria has gone way too far the other way. it was obviously that they ended 10 years ago. the last six, eight, 10 years. but it's gone far too far the other way. it is too difficult to qualify for a loan documentation is overwhelming for money. neil: john, let me step back and look at the politics.

mitt romney has said that he would like to replace the fed chairman when his chair is. he has not been very complimentary about ben bernanke. lo and behold, i have seen the third quantitative easing in as many years, virtually all of it under this president. do you feel that ben bernanke is working for the reelection of barack obama? >> it is hard for me to say. i don't know that i'm qualified to speak on that issue. just for the sake of easing, we will all have inflation for that. neil: among other things, ben bernanke said he looks at the market. again, simplifying this. then he eases the market, he looks at it as something to judge monetary policy.

>> i don't know if that's such a good idea. >> these things tend to be short-lived. i think it will have very little effect on the economy whatsoever. neil: john king, thank you. well, the man who took a giant leap for mankind. why are some taking a giant leap backwards? what john kennedy said almost four decades ago, that he wanted to land a man on the moon. do we need something like that

to reinvigorate the state's program? is it necessary? what do you think? >> it does take leadership. it is no doubt that things don't happen, this doesn't happen without leadership and the support of the public in general.

>> one small step for man, one giant leap for mankind. neil: we interrupt this bumbling american giant to remember a time when america was in stumbling. it was leaving. when neil on strong walked on the moon. john kennedy accomplished it

what he said. armstrong was remembered in a special memorial service. the kind of impact that we have had with neil armstrong. if you wanted to go to the moon, you couldn't need it. if you wanted to go to heaven, you can darn well find a plan to be in the heavens. when no one said no. as if we didn't know. economic gains back then. we did. we just didn't let that stop us or slow us.

or deter us. we didn't let it be desperate that is what i remember. we officially say goodbye to a legend on this day. we quit acting legendary. >> we are broke as far as monetarily and leaders. we had a bold person with john kennedy and heroes that stepped up. we still have heroes, but we don't have a bold person in politics. we had john kennedy do a good job. [talking over each other] [talking over each other] neil: he did not when he didn't have nearly the debt we do have

now. >> there is no doubt that our debt is hampering what we can do worldwide. we are the only empire in the history of the world that controls allport ocean spray a lot of countries don't have to build like we do. i don't think that nasa has shared the plans. neil: we are going to let wicked liz macdonald talk to him. neil armstrong and his interview. >> a mars mission with people, 12 to 15 years. that is our aspiration. neil: that was liz claman,

obviously. not wicked lizzie. >> this guy is the next guy. he's just not crazy like tesla ended up being. he really is the future. >> look at what richard cameron is doing. planetary resource. these guys are going to asterix in the next 10 years. that sounds a lot like john kennedy in what he is doing. neil: we are so grateful for weird things now. well, 1.25% growth, we know it should be five or six or 7% growth. we have gotten used to all this.

i'm wondering whether it if that is driving us. the sense that mediocrity is what we have gotten you through. >> we have accepted a low bar and rear hand to mouth as far as government from month to month. in every aspect from top to bottom. we have been allowed to accept that we have no long-term plans to be one it jumped up. the fed can do it alone. you need some kind of fiscal policy to go with it and we just don't have that. >> what is it say about our society and our country where ben bernanke is our hero?

where he is earning armstrong our leaders have failed us as far as fiscally and any type of budget is concerned. we don't have an energy plan. we don't have a tax plan from an innovation plan, and that is because the guys can't get along in washington dc. neil: thank you very much. the war on food. it is flirting out of control.

the. neil: mcdonald's announcing its

going to post calorie counts on its menus nationwide. new york city passing a ban on large, sugary drinks. the economy is short of a happy meal. my next guest says that now is not a good time to be focusing on big macs is the problem. we are focused on the burgers and not the real beat. what you make of all this? >> clearly, the new york city soda ban in government overreach at its best. i can say that mayor bloomberg did not consult with the franchise industry, the restaurant industry, or the beverage industry. i also found it interesting that 60% of residents opposed to the band. it is going to be very costly for restaurants and put them at a competitive disadvantage. my senses it will do little if anything to minimize obesity.

neil: trying to cut back on consumption in america -- having said that, i think a lot of these institutions, mcdonald's and whatever -- they get the menus up and running. they offered salad and yogurt. some of them were risky. they were covering their you know what we did. they do it and, they get them off the bat. what you say? >> we were faced with a patchwork quilt of regulations being promulgated around. so we had two options. first we could deal with that, or we could push for federal and national standards to provide more consistency for our franchisees. that is the route that we chose

to go. at the end of the day, mcdonald's is an industry leader and we remember that prior to the health care lobbying past, cities such as new york and philadelphia have already passed laws regarding these things. at the end of the day, my senses you will see more companies follow mcdonald's. they will also try to get out early from an implementation standpoint. that is my sense. neil: i don't think you can go into a mcdonald's in a single one of their egg mcmuffin's is like having a salad. well, i'll tell you, the salads

now have more calories than some egg mcmuffin. but it's our choice. it's our choice and our call. to be babied nationally as we are, it is insulting to have it be so expensive. >> consumers do want choice. and we know that. we have to take this back to jobs as fast as possible. we have an 8.1% unemployment rate. 360,000 people dropped out of the work force this last quarter. neil: you hit the nail on the head. we can argue over, you know, french fries and hamburgers and forget that the economy is what is kicking us. not the burgers. >> that's exactly right.

23 million people unemployed. underemployed. working part-time. would have given up working for work. we need jobs and we need them fast. small business owners need certainty around taxes. so they can make choices to invest. for the aspiring entrepreneur and franchisee, one who wants to expand their network am it's a difficult environment. neil: pete, thank you very much. >> it was great to be back. neil: we are following up on a breaking development. we discovered the guy who sounds like he's french now sounding british. >> estates on their own are no longer able to effectively steal the cause of events

neil: you heard it for yourself. the head of the european union now sound like this. [inaudible] the head of the eu.

the. neil: we have chaos breaking out in the middle east. investors rallying here. focusing on stimulus. who is right with these overlapping development? the blowup over the bailout? we thought that we would ask kyle harrington.

>> i think that we have seen qe-1, qe-2, now qe-3. in the short term, doing good in the short term. i believe believe that in the long-term, and issue will continue in what will be what is going on in the middle east -- neil: why would the middle east sees that her central threat? >> you don't think this will be? >> i think we have a significant problem in the middle east that seems to have snowballed just in the last couple of days. i think that you will see as a result gasoline prices in the united states suffer and go higher. and the consumer, even more so than in the past month, watching their wallet much more closely. neil: i agree with you.

neil: i agree with you. so you should probably run the other way. but there is another argument for this. with the amount of money that we are loaning the middle east, and with money that we don't have, the u.s. dollar is the safe haven. i think people are second-guessing whether or not -- >> you think this is more of that damning indictment. so it has a more profound impact.

neil: the move to keep this recovery going. even making the promise for three years, do you fear that in so doing, they plant the seeds of their own disaster? in other words, inflation comes back and a they pre-promise they're not going to do anything about it. >> i think in the short term, this is certainly a move financially as well as politically going into this november election. the. neil: but it will help the

president. >> will guarantee his reelection? no. i think we have done enough damage in the financial arena. meaning, whether it be the regulatory arena, the obamacare arena, the jobs market, jobs, it is a serious issue. as you know, we have been talking about that. i think this is not guaranteed. >> i think it's a nice little present for barack obama. neil: i think you are a very smart young man. kyle harrington, thank you very much. we miss you, neil armstrong. it's okay. we still have you in our hearts looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits.

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>> neil armstrong is gone in. the closest thing to a hero is ben bernanke. closest thing we have got to the guy walking on the moon. not a hero but with the financial markets today, the man who could promise a rescue then actually deliver. on a day we say by two legendary performance

because research time and when year with buying all the treasury bonds seeking get his mitts on. what is more he just makes a super hero promise keeping them low three years. we have a hard enough time getting leaders to stick to their promises. they seem out of this world of the expectations are to keep financially safe. if only neil armstrong had it so easy. he just walked on the moon. this guy walks on water. what is appropriate to say mitt romneyhe